NAV on 2019/09/16
|NAV on 2019/09/13
|52 week high on 2019/04/23
|52 week low on 2018/12/10
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
Satrix Managers (Pty) Ltd.
FTSE/JSE RAFI40 Index (J260)
Satrix Investment Team
Satrix RAFI 40 Index Fund - Jun 19
Global equities rebounded in June as the US-China trade war ebbed and Trump backed off on some of his threats. Global growth data remained negative with further declines in PMIs. Although the 19 June Federal Open Market Committee meeting saw no rate change, it delivered a strong statement, virtually promising a rate cut at the 31 July meeting.
During the second quarter of 2019, the MSCI World Index realised a gross return of just more than 4%, outperforming the MSCI Emerging Markets Index, which managed a very modest return of 0.6% over the same period. Global bond yields continued to rally with US 10-year yields down to 2.01% and trading sub-2% for the first time since late 2016. US 10-year yields are down more than 125 basis points since November 2018.
In the first half of 2019, the MSCI World Index delivered a total return of 17.4%, outperforming Emerging Markets (+10.8%). Within the MSCI World, North America was the best performing region with a return of 18.9%, followed by Europe’s 16.5% and the Pacific region’s 11.3%.
In South Africa weak economic data dominated the post-election headlines with firstquarter GDP falling 3.2% quarter-on-quarter, worse than the -1.6% Bloomberg consensus. The President’s State of the Nation Address promised little more than further Eskom bailouts and progress on spectrum auctions with few details/deadlines.
During the second quarter of 2019, the FTSE/JSE All Share Index (ALSI) posted a total return of 3.9% versus the 8% for the first three months of 2019. SA Financials was the best performer, returning 5.4%, followed by SA Industrials with a total return of 4%. SA Resources only managed a gain of 2.4% in the second quarter after the large 17.8% total return in the previous quarter. The FTE/JSE All Bond Index (ALBI) returned 3.7% after posting a similar return of 3.8% in the first quarter. Property managed to outperform bonds, posting a total return of 4.5%. Among the other important indices the FTSE/JSE Shareholder Weighted All Share Index (SWIX) (2.86%) performed in line with the FTSE/JSE Capped Shareholder Weighted All Share Index (Capped SWIX) (2.90%).
In the first half of 2019, SA Equities was the best performing asset class, with the ALSI delivering a total return of 12.2%. SA Bonds gained 7.7%, whilst SA Property was the worst performing asset class with a total return of 6%. Cash posted a total return of 3.6%.
The FTSE/JSE RAFI Top 40 Index returned 3.73% over the quarter, underperforming the FTSE/JSE Top 40 Index by 0.88%. On a 12-month rolling basis the RAFI Top 40 Index outperformed the Top 40 Index by 7.8%.
The relative underperformance for the quarter was mainly attributable to the large overweight position in Sasol, which declined 22%, as well as the overweight position in Intu Properties, which fell 33%.
The major contributors to relative outperformance were the fund’s overweight positions in ABSA Group and MTN, which returned 20.3% and 20.5% respectively.
The RAFI 40 Index is rebalanced once a year in March and is based on multiple fundamental factors in order to calculate the fundamental weights as per the ground rules. The data used to determine these factors are taken over the prior five-year period.
The mandate of the Satrix RAFI 40 ETF ('Satrix RAFI 40') is to track, as closely as possible, the value of the FTSE/JSE RAFI 40 Total Return index (J260). Satrix RAFI 40 is an index tracking fund, registered as a Collective Investment Scheme and is also listed on the Johannesburg Stock Exchange as an Exchange Traded Fund. Satrix RAFI 40 provides investors with the total performance of the FTSE/JSE RAFI 40 portfolio Total Return index (J260). In accordance with the investment policy of Satrix RAFI 40, all distributions (net of dividends withholdings tax) are re-invested on behalf of investors through the purchase of securities comprising the FTSE/JSE RAFI 40 portfolio Index (J260) in accordance with the calculation methodology of the total return version of this index, thereby increasing the net asset value of each Satrix RAFI 40 security.